Real Estate vs. Trading Options [Which Is Better?]

Real estate vs trading options. Which is better?

People have debated real estate vs. stocks for a long time.

Real estate investing has been around for a long time.

But you can actually invest in real estate in the stock market (using REITs)

Discover whether stocks, the stock market, and options trading is a better investment than options trading.

And also learn why there are many hidden fees associated with real estate.

And also, why real estate is more stressful and more of a headache.

--

By becoming a student of BestStockStrategy, you can maximize your trading profits AND reduce your risk while also saving yourself time and avoiding mistakes.

We provide the absolute best strategy and education so that you can optimize your success and become consistently profitable.

---------

✔️ **NEW** Podcast:

---------

BestStockStrategy provides the absolute best way to be a profitable trader in the stock market.

You will receive the best financial education, real-time trade alerts and Options Trading education products

You'll learn the best options trading strategy and you'll learn optimal stock market strategies that Tastytrade and Option Alpha don't teach.

You can become successful in stock trading and learn how to make money by trading stock options

Learn how to invest in the stock market, option market and how to make consistent profits in the financial markets.

We teach our students how to become successful and profitable investors and traders.

Please subscribe, comment, like & share this video.

🛑 David Jaffee & BestStockStrategy are NOT, in any capacity, a licensed financial advisor (adviser), registered investment advisor, registered broker-dealer or FINRA | SIPC | NFA-member firm. Examples presented in this video, or anywhere else, including video tutorials, strategies, articles, emails, newsletters, and all other content of Company’s products (collectively, the “Information”) are provided for informational and educational purposes only. Such set-ups are not solicitations of any kind or order to buy or sell a financial security and should not be construed as investment advice under any circumstances. David Jaffee and BestStockStrategy will NOT be held liable for losses resulting from information or advice presented; the use of such information is entirely at the risk of the user. The sole and exclusive maximum liability to David Jaffee and BestStockStrategy for any damages or losses shall solely be dissatisfaction to the user. The risk of loss in trading securities, options, futures and forex can be substantial. Options involve risk and are not suitable for all investors. Consider all relevant risk factors, including their own personal financial situation, before trading. Past results of any individual or trading system published by Company are not indicative of future returns.

#optionstrading #realestate #realestatevsstocks

[BestStockStrategy]

*Real estate or stocks?* Which is better?

[Kenman]

My family and I own 6 Rental homes, have had apartments and more. Between the Taxes, maintenance and dealing with tenants I agree with you 100%! Even though I'm not involved home flipping, sales and such. When I get the chance I'm going to get rid of a few buildings and use the money to increase my buying power for more trades and farther out of the positions to reduce risk. Keep up the good info David!

[ActiveBelligerence]

You arent taking into account tax benefits, or leveraged appreciation, or how inflation increases returns

[REALPLSHOWN]

David I appreciate your channel as you are the only other youtube channel sharing real P&L. However I have to disagree with one of your statements. I have studied covered call writing extensively. I am not sure you can make 12-15% return just writing calls on the SPY. Actually you may or may not be able to outperform the market. If you run the numbers the market has very few big up days that account for a large portion of the overall market gains. If you are writing calls you could miss out on these big move days. I would be more than happy to back test your strategy to pove its validity. I think this makes two areas where we disagree, the other is selling naked options. Thanks

[joestory]

Real Estate is Not Liquid Which in turn could turn into a Liability !

[pitherra]

I'm done with investing RE. When I hear people talking about rehabbing, fix and flip, wholesaling, or being a landlord, I'm already fed up. Reason I'm fed up because its it's too much work.

REI is not bad if you're doing short term. Once you sell the property put your money into trading options. I agree with you.

Right now I'm a notary loan signing agent. I'm doing that short term to have money to grow my trading account.

Soon I save enough money, I'm going to purchase your course.

[jamesharris]

I think more people will be profitable with real estate because, just as you said, many people are too impatient to trade successfully.

[JL-qstb]

We inherited rental apartments, they are in a good town but it has lots of turnover. Every two to three years we have tenants come and go. We go through a screen process because we had bad tenants causing too many problems. Still its take a lot of time and then there's the upkeep And when it goes bad, its really bad.


Selling options to make income every month takes less time and with less headaches. For me, time has become valuable.

[swish]

Thanks for the Video but I didn't get the concept of the covered calls in combination with an index.

[albacharles]

Great video, are you going to post more with improved video quality?

[touher]

So many negative comments and misconceptions about real estate. Minus the HGTV and grant cardone hype, there is real value in rental real estate (not house flipping). The number #1 pro of real estate - this is the only financial instrument with superior tax upside. For example, you can sell your investment property under IRS code 1031 and exhange for a like kind property (sell 1 unit and buy a 2-4 unit, or ranch, or raw land or even a commercial building) and "defer" the taxes. That means you own $0. When you sell your primary home, IRC section 121 allows you to keep $250k if single or $500k if married tax free. Second pro is leverage. You can use a FHA loan and down 3.5% of the sell price and own a 1-4 unit when you house hack (live in one side and rent the others). For example, you buy a $300, 000k four plex, down payment will be $10, 500 and the bank will lend the other $289, 500 for the next 30 years at an amortize scheduled. This lends to me to the third pro - consistent monthly cashflow. Taking the 4 plex above as example, your principal and interest will be $1382 at 4% interest rate. Add taxes (estimate $4, 000/12= 333 per month) and insurance ($2000/12=$166)= $1, 882.00. Account for 1% capital expense ($1200(rent per unit)×4= $480) and 1% repair ($1200×4=$480), 10% vacancy = ($1200 (1 month lost)=$120) = $1080 variable expense. $1882 + 1080= $2962 total expense. Assume $1, 200 for rent per unit (×4)= $4, 800 gross rent income. Minus $2962 = $1863 net income or cash flow every month. Not to mentioned all expenses are tax deductible - meaning you get to keep most or all of your profits. 4th pro - every month your net worth increases as a result of the loan principal pay down.

There are cons like most of you mentioned. Like crappy tenants, dealing with clog toilets and leaking roof. These are "inherent" risk that comes with investing and can be mitigated with proper tenant screening (background checks, using tier scoring, etc) and having an adequate budget (as accounted for in the cap ex calculation above) to pay a contractor or handy man to do the work. Ofcouse cash flow will be dependent on where you live (CA and NY cost more than in the mid west). It can be done folks. To put things into perspective, I myself bought a duplex in 2016 and is looking to purchase another one next year. I also trade options (specially sell covered calls) and have been profitable.

Bottom line: comparing real estate to options is like apples to oranges. Both have its advantages and disadvantages. But a skilled, prudent and diligent investor will know how to take the amount of calculated risk to get a maximum amount of return. Happy trading and keep an open mind.

[joea]

I am interested in the education you offer. Primarily looking for a side hustle while keeping my full time job and juggling family. What is the best strategy to start with for someone like me, a little bit of investing experience, but need guidance. Thanks!

[markb]

Good video Jeff, and I am a subscriber to your monthly services.
I agree with your review of real estate investing.  I tried this a few years back and realized that being a Land Lord was not for me – for many of the reasons you list here.  From my discussions with those in the business, you really need 4 or more rental units before it will start paying for itself - spreading the risk out so the number of units netting you a profit will pay for the duds.  The problem is that for each unit you acquire, the amount of time the business requires of you goes up.  
I have another question, what effect will the zero dollar broker fees have on option trading?  In particular, do you think this reduction in transaction cost will increase the number of assignments?

[Putseller]

Hey David if there was any debate before between the 2 now with 0 commission trading with some broker firms I can’t see how anybody would side with real estate

[Redacted-Ex]

I used to have a condo, a townhome, and a house as investment properties, and I can truthfully say they were the worst investments I ever made. Between a string of bad tenants, tenants who had no respect for my property and destroying them (since they didn’t own it, they didn’t care), and all of the repairs and maintenance... I lost money consistently. Court dates to evict squatters, taking up to six months, during which they generated no income. Judgements that took two years to collect.

So no, I’m not a fan. I offloaded my properties 15 years ago and haven’t looked back.

I’d rather put my money to work for less risk. Because yes, RE investing is more risk.

[richardrodriguez]

I agree with your points, but there are serveral big benefits that i try to take advantage of. I sell options (covered calls, cash secured puts) and invest some of the profits in realestate when i can. I get the benefits of depreciation of realestate as well as the writeoffs on expenses (capital improvements, repairs, business expenses ) that i can write off against my gains and make it appear as if i made less. In effect investing my gains in an asset instead of giving the money to the government in the form of taxes. Im paying the same "taxes" or maybe more in realestate, but im putting the money in assets which will rise over time due to the devaluation of our currency. Therefore investing the money back in my realestate buy and hold properties as opposed to investing in our bankrupt government. What are your thoughts in realestate as tax shelter?

[claudineernser]

Places with strong real estate markets (NY and Cali) are HORRENDOUS for taxes. And other places, like FL, TX and Arizona are so competitive that it's impossible to earn a large return.

[kenkenichi]

David quick question Since your strategy involves selling do you usually sell options with one week till expiration or is it always 30 days out?

[tommywarren]

Trading options is much better than owning real estate, plus people can control real estate with the liquidity by owning REITs

[bananabb]

Hi David! I did a couple video's on this topic ... LOVE using Covered Call Writing in lieu of using Real Estate Rental Income :) Thanks again!